What is included in the definition of 'Gross Revenue' for a Cilantro Taco Grill franchise?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
1 "Gross Revenue" includes all sales of every kind and nature at or from your Franchised Business location or made pursuant to the rights granted to you by the Franchise Agreement, without deduction for delivery costs or other write-offs. "Gross Revenue" does not include (i) any sales tax or similar taxes collected from customers and turned over to the governmental authority imposing the tax, (ii) properly documented refunds to customers, (iii) properly documented promotional discounts (i.e. coupons) and (iv) properly documented employee discounts (limited to 3% of Gross Revenue). Gross Revenue does not include gift card purchases, at the time of purchase, but Gross Revenue does include the redemption amount of purchases made by gift card. If you do not report revenues for any week, then we will collect 120% of the last Royalty Fee collected and settle the balance the next period in which you report revenue. You are required to set up authorization at your bank to allow us to electronically transfer funds from your bank account to our bank account. Interest and late fees will apply to any late payments or electronic funds transfer requests denied due to insufficient funds.
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, 'Gross Revenue' encompasses all sales of any kind from the franchised business location or resulting from the rights granted in the Franchise Agreement. This calculation does not deduct delivery costs or other write-offs. This definition is important because royalty fees are calculated as a percentage of gross revenue.
However, the definition of Gross Revenue for a Cilantro Taco Grill franchise specifically excludes certain items. These exclusions include sales tax or similar taxes collected from customers and remitted to the appropriate governmental authority, properly documented refunds to customers, properly documented promotional discounts such as coupons, and properly documented employee discounts, which are limited to 3% of Gross Revenue.
Additionally, the 2024 FDD clarifies the treatment of gift cards. The purchase of a gift card is not included in Gross Revenue at the time of purchase. However, the redemption amount of purchases made using a gift card is included in Gross Revenue. Finally, if a Cilantro Taco Grill franchisee fails to report revenues for any week, Cilantro Taco Grill will collect 120% of the last Royalty Fee collected and settle the balance the next period in which revenue is reported.